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Raising The Quality and Productivity of the Construction Workforce To Boost Economic Competitiveness

30 October 2014

  1. In Budget 2014, DPM Tharman Shanmugaratnam mentioned that more can be done to raise the quality of the construction workforce, including requiring a minimum proportion of Higher Skilled (or R1) Work Permit Holders (WPHs) at the firm-level to improve the skills profile of the construction workforce.

    Four new complementary measures will be introduced to facilitate this:

    i) Up to 10% upgrading requirement of Basic Skilled (or R2) WPHs between 1 January 2015 to 31 December 2016;

    ii) 10% minimum R1 requirement from 1 January 2017;

    iii) Direct R1 pathway from 1 September 2015; and

    iv) Allowing employers to hire WPHs who have come to the end of their work permit term, from 1 June 2015.

    Key Features of the Measures

    A. Implementing a 2-year upgrading phase for construction firms from 1 January 2015 to 31 December 2016
  2. Across the construction industry, about 15% of WPHs have qualified as R1 workers. However, they are unevenly distributed across firms. To accelerate the formation of a higher-skilled construction workforce across the entire industry, BCA will implement a two-year upgrading phase from 1 January 2015, requiring construction firms to upgrade 5% of their own WPHs to R1 status by end 2015, and another 5% by end 2016. This will enlarge the pool of R1 WPHs in Singapore.
  3. Firms can upgrade their own R2 WPHs to R1 status via three pathways, namely (a) the CoreTrade and Multi-Skilling scheme; (b) Market-based Skills Recognition Framework (MBF); or (c) the new direct R1 pathway (see Paragraph 8).
  4. Construction firms who have at least 15% of their WPHs qualified as R1 workers will be exempted. This will build up a pool of R1 workers across the vast majority of construction firms, and help raise overall workforce capability.

    B. All construction firms to meet new firm-level R1 requirement from 1 January 2017
  5. Following the 2-year upgrading phase, the government will introduce a minimum 10% R1 requirement for all construction firms from 1 January 2017. This is designed to encourage all firms to retain a critical mass of R1 WPHs, after they have upgraded their own workers. Undergoing the 2-year upgrading phase would allow most firms to meet the minimum 10% R1 requirement, if they have retained their R1 WPHs.
  6. With this new firm-level R1 requirement, BCA will phase out the project-level CoreTrade1 deployment requirement for Tradesmen and instead focus on building up key construction personnel at the Foremen and Supervisory levels. This will provide construction firms with more senior employees to guide the less experienced workers, and improve productivity through better site management.
  7. About 60% of construction firms already meet the 10% R1 requirement. Of the remainder, the vast majority (around 80%) need to upgrade one or two of their R2 WPHs to R1 status over the next two years in order to meet the requirement.

    C. Implementing the new direct R1 pathway from 1 September 2015
  8. As an added measure to help construction firms build up their pool of R1 workers, MOM and BCA will introduce a new R1 qualification pathway from 1 September 2015. Skilled construction workers who earn a fixed monthly salary of $1,600 or more, and pass a CoreTrade or Multi-Skilling equivalent test, can qualify as a R1 worker. This new pathway will benefit skilled workers who are classified as R2 today but are not eligible to convert to R1 due to insufficient years of local construction work experience. It will also allow firms to recruit more experienced and skilled construction workers as R1 workers directly from overseas.

    D. Employers will be allowed to hire construction WPHs at the end of their work permit period from 1 June 2015
  9. For every three new construction WPHs, one would leave Singapore after gaining two years’ of work experience here. At the same time, the construction industry continues to hire inexperienced WPHs. Such churn imposes a drag on workforce capability and productivity. More must be done to retain these experienced workers, and to enable other firms to hire them. Hence, employers will be allowed to hire construction WPHs at the end of their work permit period, without having to leave Singapore, from 1 June 2015. This will allow Singapore to retain better workers and reduce the risk of losing them to other work destinations.
  10. Employers will continue to have certainty on the availability of their foreign workers during their work permit duration, while avoiding additional costs of having to arrange and pay for sending their workers home, and on search and hiring costs for experienced construction workers who want to switch employers at the end of the work permit period. MOM will release further details on this initiative in due course.
  11. Please refer to Annex A for further details of the measures. BCA and MOM will be conducting industry briefings on these measures soon in conjunction with the Singapore Contractors Association Ltd (SCAL).

1 The Construction Registration of Tradesmen (CoreTrade) is a registration scheme administered by BCA, for the skilled and experienced construction personnel in the various key construction trades. CoreTrade was introduced to allow the construction industry to build up its core group of competent and experienced workers in key construction trades, who will serve to anchor and lead the construction workforce, and raise overall quality and productivity levels. It does so by providing a clear career progression path to better and more experienced workers, and giving them due recognition. It allows one to move from a basic skilled worker, to a registered CoreTrade Tradesman specializing in specific trades, then a registered CoreTrade Trade Foreman, and eventually a CoreTrade Supervisor.

Annex A - Factsheet on A) Two-Year Upgrading Phase, B) Minimum R1 Proportion at Firm-Level and C) Pathways To Upgrade R2 Workers to Attain R1 Status